The beauty industry has encountered significant financial difficulties over the past year, prompting numerous companies to file for bankruptcy or cease operations. Notably, Cutera, a beauty tech firm, entered a prepackaged Chapter 11 bankruptcy in March 2025 but successfully restructured and reduced its debt by $400 million, emerging from bankruptcy by the end of that year.
In early 2026, two AS Beauty Group brands—Cover FX and Mally Beauty—announced the permanent closure of their online retail operations. Founded by industry veterans such as MAC Cosmetics co-founder Victor Casale and celebrity makeup artist Mally Roncal, the brands cited a shift in market dynamics and evolving customer preferences as the reasons for their shutdown.
Recently, Driftwood Yoga, Spa and Boutique, located in Denver, North Carolina, filed for Chapter 11 bankruptcy protection. Opened just in 2023, the boutique spa accrued approximately $1.4 million in debt. Although it has expressed intentions to maintain normal operations during the reorganization process, it has not communicated details about the situation to its customers. A similar case involved Modern Medical Aesthetics from St. Petersburg, Florida, which also filed for bankruptcy in February 2026. This medical spa, offering aesthetics and wellness services like Botox and laser hair removal, reported liabilities between $100,000 and $500,000 owed to a limited number of creditors.
Additionally, other establishments, such as Body Oasis in Alabama and Small Indulgences Day Spa in St. Augustine, experienced shutdowns, leaving customers stranded with unfulfilled bookings and financial losses.
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